Question

why in the study of management accounting, so much attention is focused on costs and efficiency

Answer 1

Effective cost management is the central measure of accountability for business leadership. Cost management includes effective strategy implementation as well as providing the resources and process discipline to enable and ensure the highest possible level of quality, reliability and productivity at the lowest overall cost. It is not about cost in the sense of cutting cost. Rather, cost management is the process of optimizing performance. It is as much strategic as it is operational.This concept is very important and it plays very important role in profit maximaization and cost reduction ,therefore it requires more focus and concentration

he first step in any undertaking is to ensure clear and aligned expectations. This is especially true in cost management, where many managers only cost experience is in cost cutting, such as staff reductions, product and facilities rationalization, and cutting capital budgets. While these actions are sometimes necessary, effective cost management lies in an everyday process discipline that continually addresses the root cause of excess staff, unprofitable and overexpanded product lines, and the justification and implementation of marginally effective control systems. Effective cost management deals with the underlying systems which create the need for such structural cost elements.

The meanings of the words knowledge and tools depends on ones beliefs about the basic motivations behind human behavior. If an organizations executive leadership believes most employees arrive at work with the willingness and desire to do their best, the job of employee motivation and performance is abundantly straightforward. Each individuals level of knowledge and capability becomes the essential component of the employees ability to perform well.

For example, if an organization wants to optimize the trade-offs between volume, margin and manufacturing cost, the sales forcethe very people responsible for revenue and marginmust have a solid understanding of manufacturing, standard cost, and the impact of their product and customer-related decisions on the broader organization. The same is true of the planning (scheduling) and production side of decision making. They, too, must have the relevant understanding of how each of their actions affects the customer, cost, inventory and product lead-times.